FALL IN FREE STERLING

New Zealand Herald, Volume LXXVII, Issue 23621, 3 April 1940, Page 9

FALL IN FREE STERLING

UNITED STATES' MOVE OFFICIAL RATE FOR DUTIES (Received April '2. 5.5 p.m.) WASHINGTON, April 1 In orddr to protect American industry against a flood of British goods stimulated by depreciated sterling the Treasury is instructing the customs authorities, in assessing duty, to recognise the official rate for- the pound of 4.02} to 4.03*, compared with the unofficial rate, which to-day is 3.55-2 to the pound. Action is possible within 24 hours. The weakness of the free market for sterling m New York causes no anxiety to the British authorities as it largely represent? unauthorised business. The middle quotation offered by the Bank of England for official transactions is 4.03 dollars to the pound sterling. Recently, in order to close the avenues for foreign holders of sterling to buy from Britain's dollar resources without permission, :he British authorities decreed that all exporters should invoice their sales in the currency of the country to which export is made. The effect of this tightening of control is to direct business through the official market and referring to this development the Economist recently declared: —"As long as the free market can be isolated from the vast bulk of exchange transactions in sterling, the rates which it quotes for sterling need cause no concern. If they are unduly low the loss will only accrue to foreigners who wish to get sterling assets out of the country and to other parties on whom no excessive tears may be lost in our present emergency."